Central Maine Power Co. v. Public Utilities Commission
| Decision Date | 06 August 1979 |
| Citation | 405 A.2d 153 |
| Parties | CENTRAL MAINE POWER COMPANY v. PUBLIC UTILITIES COMMISSION, et al. |
| Court | Maine Supreme Court |
Pierce, Atwood, Scribner, Allen, Smith & Lancaster by Gerald M. Amero (orally), James E. Purcell, Portland, Seward B. Brewster, Augusta, for Central Maine Power.
Blodgett & McCarren by V. Louise McCarren (orally), Burlington, Vt., Paul A. Fritzsche, Pine Tree Legal Assistance, Inc., Lewiston, for Maine Committee for Utility Rate Reform, the Consumer Action Coalition, and Bruce M. Reeves.
Frederick S. Samp (orally), Cushing W. Pagon, Horace S. Libby, Stephen A. Johnson, Public Utilities Commission, Augusta, for the Public Utilities Commission.
Fitzgerald, Donovan, Conley & Day by Mark L. Haley (orally), Bath, for the Maine Oil Dealers Ass'n.
Peggy Wells Dobbins (orally), Legal Dept., St. Regis Paper Co., New York City, Perkins, Thompson, Hinckley & Keddy by Thomas Schulten, Portland, for St. Regis Paper Co.
Edward Lee Rogers (orally), Augusta, for Natural Resources Council.
Before POMEROY, WERNICK, ARCHIBALD, GODFREY and NICHOLS, JJ.
On January 16, 1978, Central Maine Power Company, 1 pursuant to 35 M.R.S.A. § 64, filed with the Public Utilities Commission 2 a revised schedule of rates and certain revised Pursuant to 35 M.R.S.A. § 69 the Commission, by Order dated February 13, 1978, suspended the proposed rates for a period of three months from February 15, 1978, in order to conduct public hearings. On May 12, 1978, the Commission entered "Suspension Order No. 2" suspending the filed schedules for an additional five-month period from May 15, 1978.
rules and regulations to become effective on February 15, 1978. This filing operated as a proposal to increase rates to its customers. If effective, revenues would be increased by 12.5% Or $24,700,000 annually.
On January 26, 1978 the Commission began processing the schedules, and, pursuant to Commission order, direct testimony was pre-filed by CMP, the Commission Staff, and various intervenors. At a March 14, 1978 Prehearing Conference petitions to intervene and other procedural matters were presented. Ten such petitions were granted by Order of March 17, 1978. Four of those intervenors have participated in this appeal: St. Regis Paper Company, the Consumer Coalition, 3 Maine Oil Dealers Association (MODA) and ten individual complainants, and the Natural Resources Council of Maine. 4 The reaction of Central Maine to the participation of MODA presents special issues.
On February 9, 1978 MODA and ten individuals, all oil dealers and customers of CMP, filed a complaint with the Commission against CMP's rates filed on January 16, 1978 in Docket F.C. # 2332. Jurisdiction was alleged under 35 M.R.S.A. § 291. The MODA complaint was docketed as F.C. # 2336. CMP filed an answer and motion to dismiss the complaint on February 28, 1978. MODA moved on March 7, 1978 to consolidate its complaint (F.C. # 2336) with the pending rate proceeding (F.C. # 2332).
By its March 17, 1978 Order the Commission denied CMP's motion to dismiss the MODA complaint and granted MODA's motion to consolidate. MODA's petition to intervene in the pending rate case was also granted. Central Maine thereupon filed a complaint on April 14, 1978 with the Superior Court requesting injunction and declaratory relief, and relief in the nature of prohibition, alleging jurisdiction under Rule 80B, M.R.Civ.P. The Commission filed a motion to dismiss CMP's complaint, as did MODA and the ten individual defendants. CMP moved for summary judgment. Oral arguments were heard on July 3, 1978, and by Order dated July 6 the Presiding Justice granted the motions to dismiss the 80B complaint for lack of jurisdiction. Central Maine filed a Notice of Appeal from this dismissal with this Court on August 4, 1978, which appeal was designated Docket No. Ken-78-42.
After public notice, 26 days of hearings were held in Central Maine's rate case (F.C. # 2332), during which time the Company, the Commission Staff, and all intervenors choosing to do so participated in the presentation of direct cases and cross-examination. Twenty-one witnesses introduced some one hundred sixteen exhibits into evidence. Additionally, some ninety-four public participants testified, gave statements, and presented twelve exhibits. A total of some 4,670 pages of testimony was generated. Hearings concluded on August 9, 1978, whereupon briefs were filed and oral argument heard on September 7, 1978. The Commission entered its decision on October 13, 1978 (hereinafter the "Decree ").
The Decree disallowed the schedule of rates filed by CMP on January 16, 1978 designed to produce approximately 25 million dollars in additional revenues, and substituted Petitions for rehearing filed by various intervenors were denied by Commission orders dated October 31 and November 16, 1978.
approval of a two-step increase to produce additional revenues of $15,528,000. CMP thereupon filed substitute schedules on October 1, 1978 and December 1, 1978 designed to produce additional revenues of $6,276,000 and $9,252,000 respectively. These filings were approved by Commission Supplemental Order Nos. 1 and 2 dated October 31 and December 5, 1978, respectively.
In addition to its complaint pursuant to 35 M.R.S.A. § 305 (the § 305 complaint) filed November 2, 1978 (see Post ), CMP and several intervenors filed appeals pursuant to 35 M.R.S.A. § 303 (the § 303 appeals) on or after November 9, 1978 with respect to the Commission's Decree and Supplemental Orders. 5
Pursuant to 35 M.R.S.A. § 305, the Company on November 2, 1978, by motion filed with the Acting Chief Justice sought to stay the Commission's Decree and Supplemental Order of October 31, 1978 insofar as they precluded CMP from collecting rate revenues beyond those authorized by that Decree and Order. 6 Following oral argument, the motion was denied by decision and order dated November 10, 1978.
By Procedural Order dated January 15, 1979, this Court consolidated in Law Court Docket No. Ken-78-52 CMP's § 305 complaint, its appeal from the Superior Court dismissal of its Rule 80B complaint (formerly Ken-78-42) and the § 303 appeals taken by CMP and all intervenors from the Commission's Decree and Orders. In addition, the Order established a division of issues for purposes of submission of briefs and appendices. Issues concerning revenue requirements and CMP's Superior Court appeal were designated "Part 1 " issues, and issues concerning rate design were designated "Part 2 " issues. By a subsequent Procedural Order, dated April 12, 1979, similar provision was made for a division of issues for presentation at oral argument.
A brief outline of the issues presented by the consolidated appeal, and the position of the parties with respect to each, will be useful at this point.
(1) Central Maine Power Company is:
(a) an appellant with respect to its appeal from the Superior Court order dismissing its Rule 80B complaint.
(b) a § 305 plaintiff and a § 303 appellant with respect to Commission action concerning these issues:
(i) denial of its motion to dismiss MODA's complaint under 35 M.R.S.A. § 291, and allowance of MODA's motion to consolidate and petition to intervene. ("The MODA participation issue ").
(ii) exclusion from rate base of depreciation expense on plant financed by deferred taxes ("The deferred tax issue ").
(iii) reduction of CMP's test year revenue requirements by an amount equal to the discount provided employee and retirees ("The employee discount issue ").
(iv) use of a capital structure with a 35% Common equity ratio to determine the Company's revenue requirements, in lieu of the Company's Pro forma ratio of 35.2%. ("The capital structure issue ").
(c) an appellee with respect to the appeals taken by the intervenors, relating principally to issues of rate design ("Part 2 issues "), but including the revenue requirement ("Part 1 "), issue of the Commission treatment of its Land Held for Future Use and associated accounts, raised by the Consumer Coalition.
(2) The Public Utilities Commission is a § 305 defendant with respect to CMP's § 305 complaint, and an appellee with respect to all § 303 appeals presented by CMP and by intervenors.
(3) The Maine Oil Dealers Association and ten individual complainants are appellees with respect to CMP's appeal from the Superior Court dismissal of its Rule 80B complaint, and with respect to issues of the intervention and consolidation ordered by the Commission in the rate case below.
(4) St. Regis Paper Company is a § 303 appellant with respect to the Part 2 (rate design) issue concerning the propriety of the Commission's allocation on a uniform basis to all customer classes of the rate increases permitted by its Supplemental Orders ("The uniform percentage increase issue ").
(5) The Consumer Coalition is a § 303 appellant with respect to the Part 1 (revenue requirement) issue concerning the Commission's inclusion in rate base of certain CMP properties held for future use ("The land held for future use issue "), and with respect to the Part 2 (rate design) issue of the Commission's approval of a $5.70 residential monthly customer charge ("The customer charge issue "). While not a designated § 305 defendant, it submits an argument in support of the Commission's position with respect to the employee discount issue.
(6) The National Resources Council of Maine, Et al., is a § 303 appellant with respect to the customer charge issue, and with respect to the Part 2 (rate design) issue of the Commission's rejection of implementation of seasonally-differentiated rates in the residential class ("The seasonal rate issue ").
We reach the following conclusions as detailed within:
(1) We sustain CMP's appeal from the Commission's denial of its motion to dismiss MODA's § 291 complaint, and accordingly from the consolidation of that complaint with the pending rate case;
(2) We deny CMP's appeal...
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